Reuters
UPDATE - Kinetic Concepts stock up 34 pct on day one
Tuesday February 24, 5:01 pm ET

(Updates with closing stock price)
NEW YORK, Feb 24 (Reuters) - Stock in Kinetic Concepts Inc.
(NYSE:KCI - News), which makes oversized hospital beds and
advanced wound therapies, rose more than 34 percent on
Tuesday on its first day of trading on the public market.
 
The share price rose steadily during the day on the New
York Stock Exchange (News - Websites) , before closing
at $40.40, which was $10.40, or 34.7 percent, over its
initial public offering price of $30.

The day before its market entrance, San Antonio,
Texas-based Kinetic Concepts had increased its
IPO to 18 million shares from 14 million and estimated
the shares would be priced at $27 to $29 each.
The underwriters, led by Merrill Lynch and J.P. Morgan,
can buy 2.7 million additional shares in the event of heavy demand.

Kinetic Concepts plans to use net proceeds to repay,
redeem or retire debt, as well as for general corporate
purposes. Selling shareholders will receive nearly
$400 million of the proceeds of approximately $540 million.

Analyst Francis Gaskins, of IPO Desktop, an online newsletter,
said Kinetic Concepts, which had revenue of $764 million in 2003,
benefited from a recent court ruling against rival Hil-Rom Co.,
which is owned by Hillenbrand Industries Inc. (NYSE:HB - News)

"Winning the antitrust suit unshackles Kinetic Concepts
and fuels top-line revenue growth," he said.

Under an antitrust settlement, Hillenbrand and Hill-Rom
agreed to pay Kinetic Concepts $250 million. The jury in
the San Antonio, Texas Federal District Court found that
Hillenbrand and Hill-Rom had wrongfully attempted to
monopolize the specialty hospital bed market, Gaskins said.

Kinetic Concepts specializes in bariatrics -- the treatment
of obese patients. It makes custom-built hospital beds like
the kind used in Dallas last year for Siamese twins from Egypt.

It also develops advanced wound therapies to treat auto
accident trauma or Iraq battlefield injuries. This Vacuum
Assisted Closure, or V.A.C., technology has been clinically
demonstrated to promote wound healing and reduce the
cost of treating patients with difficult-to-treat wounds.

V.A.C. dressings are typically changed every 48 hours
for noninfected wounds compared with traditional dressings
which often require changing one or more times per day.

The company has relationships with over 3,000 acute
care hospitals, over 4,100 extended care facilities and
approximately 4,100 home health care agencies and
wound care clinics.